OnApp to add compute to its expanding federated cloud portfolio

London’s OnApp closed a new round of financing last month, taking its total funding to $20 million. So what’s it going to do with the (undisclosed) new tranche of cash? Add yet another string to its bow, that’s what.

Bear in mind that OnApp was only spun out of British hosting provider UK2 a couple of years ago, with software that lets other providers build their own public clouds. The idea there is to help these other hosting providers – OnApp now counts more than 500 of them as customers — ward off the threat that is Amazon, but in the process the company has steadily used that growing federation to diversify into new lines of business.

In 2011, OnApp launched a content delivery network (CDN) based on those service providers’ spare network capacity. There are around 130 points of presence (PoPs) in that network across 40 countries – each provider gets paid for the traffic going over its own PoP, and OnApp gets a 10 percent cut. In 2012, the company took on EMC by doing pretty much the same thing with OnApp Storage, using its customers’ commodity servers to support a distributed storage system that’s controlled by OnApp.

All that is made possible through OnApp’s marketplace and now, flush with fresh funding, OnApp is going to use that marketplace to do the same thing with compute capacity, chief commercial officer Kosten Metreweli told me:

“Adding compute is the most immediate thing. The end customer could now go to [OnApp’s customer] and say, ‘I want to spin this up in Tokyo and Moscow’. They can come to our marketplace, buy compute capacity in those locations and also have the application automatically replicated across those locations as well. It makes it much simpler to roll out true global cloud applications.”

There have of course been other marketplaces for compute capacity, such as SpotCloud. On that subject, Metreweli drew a comparison with OnApp CDN competitor XDN, pointing out that OnApp already has a huge customer base brimming with capacity. “The trouble is, they were setting up a market stall in the middle of an empty street,” he suggested.

And he’s not just blowing hot air. In terms of CDN scale, OnApp remains behind market leader Akamai and Limelight but it’s way out in front of Amazon CloudFront and has roughly the same number of PoPs as CDNetworks. OnApp Storage is a newer product, but the company gets to draw on the same customer base there. And those customers can’t hang around these days — not with Amazon breathing down their necks.

“For the majority of service providers, they’d much rather get going with their cloud service, then put their differentiation on top of that,” Metreweli said.

Apart from its compute play, OnApp also intends to use its newfound funding for market expansion – 40 percent of its business is in North America and it really wants to invade non-English-speaking territories. It also intends to turn its storage play, currently bundled with OnApp Cloud, into a standalone product.